Report of the supervisory board

Ladies and gentlemen,

During the 2024 financial year, the Supervisory Board of SEEHG Securing Energy for Europe Holding GmbH (SEEHG) performed its duties in a comprehensive and diligent manner and in accordance with the law, the company’s articles of association and its rules of procedure. It reviewed the company’s situation in detail and regularly discussed the consequences of the constantly changing energy policy framework and economic conditions at length.

The Supervisory Board regularly advised the Managing Directors on their management of the company and continuously monitored their activities. In doing so, the Supervisory Board satisfied itself that the company was being managed in a legal, expedient and proper manner. The Supervisory Board was directly involved in all major business transactions and discussed them in detail, inter alia based on the management’s reports.

The Managing Directors provided the Supervisory Board with regular, timely and comprehensive information, both in writing and verbally. In its plenary sessions and committees, the Supervisory Board had sufficient opportunity to engage actively with the management’s reports and proposed resolutions. The Chairman of the Supervisory Board and the Managing Directors also communicated frequently and extensively outside of Supervisory Board meetings.

The Supervisory Board held 14 meetings to address issues relevant to the Group’s business performance. These meetings focused in particular on operational and financial trends, as well as on the company’s transformation within the framework of the new corporate strategy. In addition, the Supervisory Board regularly reviewed strategic projects that are important for the company. To the extent required by law, the articles of association or the management’s rules of procedure, the Supervisory Board decided on the resolutions proposed by the Managing Directors after thorough review and consultation. In the 2024 financial year, approximately 62 transactions were reviewed and approved by the Supervisory Board. Eleven of these resolutions were adopted outside Supervisory Board meetings by written procedure.

Key topics discussed by the Supervisory Board

During the period under review, the Supervisory Board paid particular attention to the company’s strategy. The Supervisory Board obtained detailed information on the strategy process and consulted with the Managing Directors. The energy transition has been identified as a key focus, which is supported by the Supervisory Board. The strategy includes both the integration of renewable energy sources into the product portfolio and product diversification, while at the same time ensuring the security of supply in Europe. In addition, the Supervisory Board discussed the financial strategy, also in view of the Group’s upcoming privatisation.

With regard to the company’s operations, the Supervisory Board thoroughly reviewed price trends on national and international energy markets, as well as the Group’s economic situation, on which the Managing Directors continuously provided reports. Specifically, the Supervisory Board discussed the net assets, financial position and income, as well as the earnings opportunities and risks, of SEEHG and its Group companies. The geopolitical situation and sanctions also played a role in the deliberations.

Throughout the year, the Supervisory Board held continuous discussions on the acquisition of all shares in WIGA Transport Beteiligungs-GmbH & Co. KG, including its 100 % equity interests in the German transmission system operators NEL Gastransport GmbH and GASCADE Gastransport GmbH, which was completed in 2024. GASCADE in particular is set to play a significant role in the development of the German hydrogen core network. The acquisition of WIGA is therefore a decisive strategic step towards expanding the company’s hydrogen activities.

Regarding the global origination and trading business, the Supervisory Board consulted extensively with the Managing Directors on the portfolio strategy, as well as on the key origination and supply contracts with major LNG and gas suppliers, to ensure that the company is able to safeguard the security of supply and meet its delivery obligations.

The Supervisory Board extensively reviewed and refined the company’s principles of corporate governance, also taking into account the German Federal Government’s Public Corporate Governance Code (PCGK). The Supervisory Board was also kept fully informed of developments in the ongoing litigation in connection with the Russian delivery freeze. In addition, the Supervisory Board addressed staffing requirements and the hiring of managers in detail. Where necessary, the Supervisory Board adopted resolutions on all these topics.

Committee activities during the year under review

In order to perform its duties in a diligent and efficient manner, the Supervisory Board has established a number of committees, which are described in detail below. The chairperson of each committee regularly reports on the content and outcome of the meetings to the full Supervisory Board at the subsequent Supervisory Board meeting.

— The Audit and Finance Committee met 10 times during the 2024 financial year. Taking into account the auditor’s reports and in consultation with the auditor, the committee thoroughly examined SEEHG’s single-entity financial statements, prepared in accordance with the International Financial Reporting Standards (IFRS), and the semi-annual financial statements for 2024, and made corresponding recommendations to the Supervisory Board. The committee also discussed the proposal for the selection of the auditor for the 2024 financial year. In addition, the committee discussed in detail the company’s Management Report and the Group Management Report (Condensed Management Report) and the proposal for the appropriation of profits, and prepared and reported the corresponding recommendations to the Supervisory Board. The committee also reviewed the quarterly figures, the forecast for the period until 2028 and the Group’s business performance. In view of the company’s impending privatisation, the committee’s work focused in particular on preparing decisions on financial strategy and optimising the Group’s structure.

— The Risk Committee met 12 times during the 2024 financial year. The committee thoroughly examined the Group’s market, credit, liquidity, long-term and operational risks. It debated in detail the risks associated with individual LNG and gas purchases, as well as the risks in connection with the hydrogen business. The committee also focused on new regulations and reporting obligations, as well as the resulting requirements for the internal organisational structure.

— The Compliance Committee held six meetings in 2024. The committee regularly and extensively discussed all compliance matters within the Group. It discussed in detail how to further develop the compliance management system, how to identify compliance risks and how to initiate appropriate risk mitigation measures. In addition to specific compliance risks, the committee also addressed compliance-related structural measures. For instance, the ‘know your customer’ process and the company’s compliance culture, among other topics, are to be bolstered through employee training. Where necessary, the committee submitted corresponding recommendations to the Supervisory Board. 

— The ESG (Environmental, Social and Governance) Committee met twice during the 2024 financial year. These meetings focused on discussing progress on ESG priorities in detail. This included, above all, the company’s first-ever Sustainability Report, which was published in 2024 and transparently presents emissions targets and various topics relating to society and corporate governance. Furthermore, the committee members discussed relevant EU regulations and the Group’s ESG strategy and targets. The Managing Directors updated the committee in detail about the progress of the various ESG initiatives, particularly with regard to the acquisition of all shares in WIGA Transport Beteiligungs-GmbH & Co. KG and its impact on ESG metrics. In addition, the committee also addressed decarbonisation measures within the framework of the ESG strategy.

Corporate governance and declaration of compliance

The company applies the latest applicable version of the PCGK. Since the German Federal Government acquired its equity interest in the company in 2022, the Managing Directors and the Supervisory Board have been working to refine the corporate governance of the Group companies. For example, both SEEHG as the parent company and SEFE Securing Energy for Europe GmbH (SEFE), as well as other Group companies, have already implemented key recommendations of the PCGK regarding management and supervision, alongside numerous other standards for good and responsible corporate governance. The PCGK’s recommendations and the reporting requirements under company law are also enshrined in the respective articles of association and the management’s rules of procedure. Decisions have been taken and measures implemented across the Group to standardise corporate governance. The further implementation of these requirements is being continuously evaluated. In the 2025 reporting year, the Managing Directors and the Supervisory Board will continue to address the PCGK recommendations and discuss how to implement them even more comprehensively at the level of other Group companies.

The members of the Supervisory Board have access to all the information they need to familiarise themselves with the principles of corporate governance, the organisation and internal structures of the Group, and the composition and strategies of its businesses. The company also provides internal opportunities, such as site and plant visits, to enable Supervisory Board members to gain insight into business processes.

In the case of groups under unified management, the management and supervisory boards of the parent company should jointly issue the declaration of compliance for the parent company and those companies under its unified management that apply the PCGK. SEEHG complies with this recommendation. At its meeting on 8 April 2025, the Supervisory Board dealt in detail with the PCGK and, on this basis, together with the management, issued the annual declaration of compliance with the PCGK on behalf of SEEHG, in accordance with the recommendation contained in Section 7.1 clause 1 of the PCGK. The declaration of compliance is available to the public on the Group’s website.

Audit of the single-entity and Consolidated Financial Statements as at 31 December 2024

SEEHG’s single-entity Financial Statements as at 31 December 2024, prepared in accordance with German commercial law; the company’s Management Report and the Group Management Report (Condensed Management Report); and the Consolidated Financial Statements, prepared in accordance with the IFRS, were audited by the auditor chosen by the shareholders’ meeting and appointed by the Supervisory Board, namely PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft (PWC), Frankfurt am Main, Berlin branch. Each of these reports received an unqualified audit opinion. PWC also audited the remuneration report for the 2024 financial year.

Pursuant to Section 17.1 of the articles of association, the Supervisory Board must examine the single-entity Financial Statements, the Management Report, and the management’s proposal for the appropriation of net income or distribution of retained earnings, and report its findings in writing to the shareholders’ meeting. In accordance with the articles of association, the review of the single-entity Financial Statements must also include an examination of the proper conduct of business and the economic conditions pursuant to Section 53 of the German Act on Budgetary Principles (HGrG).

SEEHG’s single-entity and Consolidated Financial Statements; the company’s Management Report and the Group Management Report; and the auditor’s final draft audit reports were submitted to the members of the Audit and Finance Committee of the Supervisory Board on 6 March 2025. They were presented in detail at the Audit and Finance Committee’s meeting on 10 March 2025. The auditor participated in the financial statement review meeting of the Audit and Finance Committee on 10 March 2025, and reported on the scope, approach and main findings of the audit, including the focus areas. The Audit and Finance Committee examined SEEHG’s single-entity and Consolidated Financial Statements, the company’s Management Report and the Group Management Report (Condensed Management Report), taking into account the final draft audit reports, including explanations of the relevant focus areas, and discussed them with the auditor. The SEEHG Managing Directors subsequently submitted the final documents relating to SEEHG’s single-entity and Consolidated Financial Statements to the members of the SEEHG Supervisory Board on 28 March 2025 and presented them again in detail on 8 April 2025. At the Supervisory Board meeting on 8 April 2025, the Chairman of the Audit and Finance Committee reported in detail on the results of the preliminary review by the Audit and Finance Committee. The auditors attended this meeting, where they reported on the main findings of their audit and provided additional information.

On this basis, the Supervisory Board examined SEEHG’s single-entity Financial Statements and Consolidated Financial Statements, the company’s Management Report and Group Management Report (Condensed Management Report) for the 2024 financial year, and the remuneration report. The results of the preliminary review by the Audit and Finance Committee and the results of the Supervisory Board’s own review are fully consistent with the results of the audit. The Supervisory Board sees no grounds for raising any objections to the Managing Directors or the Financial Statements presented. The Supervisory Board has therefore unanimously resolved to recommend (i) the approval of SEEHG’s single-entity Financial Statements for the 2024 financial year, and (ii) the adoption of SEEHG’s Consolidated Financial Statements for the 2024 financial year.

Personnel changes in the Supervisory Board and its committees

There were no personnel changes in the Supervisory Board and/or its committees during the period under review. The Supervisory Board believes that the current membership fully meets the objectives for the Supervisory Board’s composition, taking into account the required expertise.

The Supervisory Board would like to thank the Managing Directors, all employees of the Group worldwide, and the employee representatives of all Group companies for their considerable efforts and achievements in the 2024 financial year.

Berlin, 8 April 2025
The Supervisory Board

Sincerely,
Reinhard Gorenflos, Chairman